In terms of liability protection, what does the term "per occurrence" refer to in personal auto policies?

In personal auto policies, the term "per occurrence" refers specifically to the coverage limits that are applied to each individual accident or incident. This means that if a policyholder is involved in multiple accidents during a policy period, the coverage will provide a specific limit for each separate incident, rather than aggregating the claims together under a single limit for that policy period. This structure ensures that the insured party knows the maximum amount the insurance company will pay for any single claim, regardless of how many claims are reported within the same policy period.

This concept is crucial for understanding how liability coverage functions, as it gives clarity to the insured on their potential financial protection for individual events, allowing them to manage risk accordingly. Each occurrence is treated uniquely in terms of coverage limits, which can significantly impact the financial implications of accidents and claims.